Millennial Think Tank: Trust and the Collaborative Economy

Last week we used Uber, Lyft, and other transportation start-ups as an entrance point into talking about the collaborative economy—focusing on things like brand perceptions, frequency of usage, and ethics.

On this week’s broadcast we wanted to dig a little deeper into its infrastructure—in particular, how people develop trust online, the difference between the sharing and collaborative economies (if there is one), and if the overall movement lives up to the hype.

Our panel consisted of:

Samantha Estoesta, a young Millennial working in Public Interest Research and published poet

Kiernan McGinnis, a young Millennial, 3rd year student at Lehigh University, English Lit. Major

Joe Cardillo, an older Millennial, working in content, analytics, and growth for startups (also the author of this post)

You can watch the entire hangout below, or join us after the jump for a recap and key insights:

We started this week’s hangout with a bit of a different angle— I wanted to know if there is a difference in how people feel about using an app or service that simply provides information vs. one that connects us to other people.

I asked if anyone would be willing to describe a quick run through of their mindset and actions when trying something new.

Albert volunteered to start, and talked about how he interacts with new apps in general. He’s usually paying attention to see if an app is useful, and if it’s a good experience, but he’s also conscious of time spent:

“There’s a bajillion apps out there and my phone can’t fit all of them — apps are disposable.”

He also felt that apps and app companies come and go quickly, including games like Farmville and Zynga which were popular but no longer applicable.

Jeremy chimed in and noted the difference between games vs. more useful apps like Uber or Airbnb. He appreciated being able to do things like text / call a driver and see where they are on the map, suggesting there’s an element of trust collaborative economy companies are responsible for that a company creating game apps might not have to worry about.

“When you can see them on the map, and you know where they’re going…[if they go the wrong way] you can cancel and get another ride.”

He also mentioned that one thing he looks for is convenience and ease of use, particularly when it comes to signing in via Facebook or another social service.

Samantha has used collaborative economy apps — more often in a work setting with mental health communities that share/collaborate on healthcare information. She has reservations about the collaborative economy in general, both because of personal experience watching developers treat user information carelessly and because their influence on the end results is often hidden.

“I know the type of coding that goes on in there —I know that there are lines that [include brackets, question marks, and loopholes].”

She also brought up something that is often overlooked: questions of safety and trust in the collaborative economy often focus on who does the physical work, but you’re also supposed to trust the developer, whose power is less visible.

Jeremy felt that the sharing economy and companies in the space are still in their infancy, but that they do have positive aspects that bigger, more established companies “who just want to sell you something” don’t typically have.

Micro-interactions & trust

Since Albert mentioned in the chat portion that he’s used Craigslist for years to find roommates, I asked him what kinds of things he looked for in order to know whoever was on the other end was trustworthy.

He felt that having a conversation, seeing if a place actually exists, etc… was important. With a cab service like Uber he has an intrinsic trust in the brand, though with recent reports in the press about their ethics he might be less compelled to use them.

Jeremy felt that a transparent history of messages and reviews helps instill credibility for Uber and other similar companies.

Helen joined the conversation and suggested that we’re more likely to trust other people than regulatory bodies (which might be something that’s newer/more specific to Millennials than other generations), and while she appreciated the reasons for that she also had reservations about how that idea is actually applied:

“Whether we’re looking at something as innocuous as Yelp where you’re deciding where to go to dinner or something like Uber—these systems can be gamed, reviews can be manipulated…we are perfectly happy to look at the mass aggregation of feedback from a bunch of strangers, as opposed to the handful of people that we actually trust in real life or looking to credible critics who have experience and a large body of knowledge.”

She also felt that a lack of regulatory oversight on companies like Uber meant that when problems do arise, there’s very little accountability…particularly with physical safety issues, something she’s very aware of as a woman.

Do reviews serve as a form of regulation? What else do we need?

Helen saw reviews as having some positive impact and instilling accountability, but noted examples like Uber suggest that many collaborative economy companies make a trade-off: the safety of their users in exchange for massive profits.

She also hit on a key problem with collaborative economies that I’ve worked on directly—it can be difficult to verify the identity and/or professionalism of a contractor within a marketplace platform. I worked on the operations team for the Visually Marketplace for a year and a half, and even in that environment where the product/service was delivered almost exclusively in the digital realm, we had a hard time figuring out our role in building trust/accountability into the platform. It was very difficult to define how much we owned in the process vs. the individual contractors.

I also wanted to know how much weight people assign to reviews, and also what other things people might want to see in lieu of traditional regulations.

Samantha felt this depended very much on what type of collaborative economy, and that the level of risk should map to the level of regulation / accountability. She gave the example of a low risk activity like buying eyeliner where she would trust the community / reviews to tell her which kind to buy vs. something like Uber which has a high level of risk, particularly to women.

Helen agreed, and laid out how that risk feels to her in no uncertain terms:

“If my tacos were crappy, oh well they’re crappy. But the very first time I found out about UberX, I was like, are people insane? Do people think I’m actually going to get in a cab with some strange guy at 3 0′ clock in the morning who doesn’t have a license to do this and who I can’t follow up on if there’s a problem? And they have actually gone on record as saying they have no interest in [dealing with the problem]. At the end of the day you have to trust that the CEO and developers care about you, and they don’t…they are perfectly happy to leave you with a $20 credit and a pat on the head.”

While re-watching the hangout video and my response to Helen, I was struck by how different the collaborative economy must feel to women.

This is difficult for men to understand, and one of the reasons that influential startups mostly run by men are troubling. While I pay attention more than most, there are realities to being a woman that we simply can’t access. As with all forms of privilege it’s not what happens to you, it’s what doesn’t happen and what you never see that defines the privilege.

That was part of my reply to Helen — I was thinking about how using a weather app might feel compared to an app that connects you to other humans, and how similar they often appear. It also made me think of the developer problem that Samantha had mentioned earlier. We need more women making key decisions and being in leadership positions in tech for precisely this reason.

Trust is a spectrum

I’m in agreement with Samantha that developers are often (though usually not malevolently) more concerned with ease of use than building in philosophical but just as critical issues like safety and transparency.

Jeremy also pointed out that it’s less an either/or than it is a spectrum that forces us to weigh safety and trust against convenience:

“I’m ok with not owning something as long as it’s readily available to me when I need it. I think that [convenience] is more important to us right now than trust…we’re taking the convenience and downsizing on the trust a little bit…but I think the trust factor is going to come up more.”

Helen pointed out Yelp as an example of the complicated dynamics of trust and reviews, highlighted by the incidents where business owners were threatened / blackmailed into paying to have bad reviews hidden or removed.

When I asked if the panel felt they could tell the difference between real and fake reviews, everyone nodded yes. Samantha and Jeremy both said they’d consistently seen reviews that were obviously fake, en masse.

Helen, who has a background in researching social data & analytics, mentioned that one way of finding out if an app or service has a lot of fake reviews is to look for the ones that average out as a 3. Most of the research she’s done indicates that the typical visitor who doesn’t leave a detailed review or skips commenting tends to either give an extremely favorable or unfavorable review, in other words typically a 1 or 5.

Kiernan doesn’t often read reviews—except for amusement. He doesn’t take them seriously, in particular because he doesn’t see a way to verify whether someone leaving a review really knows what they’re talking about. He’s never purchased a product online and then felt that his actual experience resonated with any reviews he’d seen.

When I asked about accountability and identity / if there’s a way to know if someone even exists, Samantha pointed out the phenomenon of people taking pictures of themselves with a product e.g. a jersey, and asked why people trust some things. She also wondered what factors are specific for Millennials as digital natives that might not exist for other generations.

Sharing economy vs. collaborative economy — is there a difference?

Since the terms is sometimes used interchangeably I asked the panel if there was a difference in how they felt about / trusted transactions where there was money changing hands vs. just sharing resources.

Samantha saw the lack of goods or money exchanged as an indicator that someone was more trustworthy:

“If you’re not exchanging goods then I’m going to [see you] as not having any inherent reason to do this…I’m probably going to trust someone who has no stake in it compared to someone who’s getting a rating or something else based on the interaction.”

Jeremy felt that the opposite was true – exchanges with money were actually more reliable, and gave the example of a study where a more expensive bottle of perfume was purchased more often than the cheaper one with the same perfume. He sees a clear exchange of value as an indicator of trustworthiness, and said that a completely free exchange feels weird to him.

Albert, who is moving from the Bay Area to Southern California, mentioned that he’s received free advice and offers of help from people via Craiglist, and has also lived with someone for 4 1/2 years that he originally met there. He doesn’t do much else with the platform but feels positively about the platform (and he gives back in similar ways via Albert’s List—a job board featuring 3,000 members that we recently featured in a blog post on community building.

I asked the panel about the neo-hippie vs. capitalism mash-up that the collaborative economy seems to create.

Helen felt that despite some of her reservations about safety with things like Uber, there are a lot of positive aspects to the collaborative economy, and it appeals to her because she prefers to share / co-own things when she can as opposed to sole ownership. She uses AutoShare, a Toronto based company founded in 1998, and is exploring similar options for a cottage with some friends. She’d rather share with people she’s fairly close too, though.

Kiernan suggested that this is similar to older, more established co-op models, and pointed at stories his grandmother told him about Italy. The smaller towns simply shared all resources, including water fountains, ovens, etc… He thinks that getting like minded people together to share made sense, and that it can be because of choice and not just necessity. He also felt that sharing is a foundation of community building.

The conversation shifted a bit towards bartering—Kiernan mentioned that a collaborative economy doesn’t have to be only about financial incentives—and I wondered if capitalism could really embrace the limitation of profits and exchange some some of the money for better communities. Kiernan felt that a set of shared values went well beyond just making money.

Jeremy saw a lot of it as coming down to options. He wanted to know that he could both embrace ownership and also sharing / collaborating with people. He doesn’t see it as an either/or thing.

Samantha and I both felt that some of what the collaborative economy does isn’t that new.

Jeremy agreed, and felt that traditional companies can also shift e.g. from B2C to B2B. I was left with this feeling that there’s a lot of potential for the collaborative economy but that it’s still, as 2–3 people said during this episode, in its infancy and there’s a lot of work to be done to make sure that it’s sustainable.

Insights

This week’s broadcast emphasized just how young the collaborative economy is.

Among the things that will have to get worked out as it matures:

Millennials have largely grown up with apps / information on demand — as a result we probably treat them as disposable (as Albert said near the beginning of the panel), and while that’s acceptable for games it becomes troubling when there’s a human on the other end.

Trust becomes more important as level of risk increases, something that’s obvious in the real world but often masked by the convenience and user experience for digital products.

Reviews aren’t foolproof, and other ways of verifying identity and ensuring safety need to be designed & tested before the collaborative economy is truly ready to replace traditional business models.

Insular tech co’s constant bent towards doing things because they can be done and forgetting or ignoring the question of “should we do this” comes at a tremendous price. The smarter collaborative economy companies will need to learn how to balance the two.

Joe is a product/ops guy working with the ArCompany team on content, growth, and analytics. He digs media, design, startups, data, rocanroll, anything science-y, and thinking about how to become a better human.